The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has awarded 25-year gas distribution licenses to 10 companies for the development, construction, and operation of gas distribution networks across the country.
The licenses, aimed at boosting domestic gas utilization, cover franchise areas in major cities, including Lagos, Ibadan, Port Harcourt, and Benin City. The initiative is designed to ensure that natural gas reaches homes and industries in key clusters across the southwestern and southern regions of Nigeria.
At the award ceremony held on Tuesday in Abuja, NMDPRA’s Chief Executive, Ahmed Farouk, announced that Nigerian National Petroleum Company Limited (NNPC), Shell, Nipco, Central Horizon Gas Company (CHGC), Falcon, and Axxela were among the recipients of the licenses. These areas are primarily connected to the Escravos-Lagos Pipeline System.
Out of 30 applications received, 20 were screened out, leaving the top 10 recipients to lead the first phase of Nigeria’s gas expansion initiative. This initiative is expected to distribute over 1.5 billion cubic feet (BSCF) of gas per day via a 1,200 km gas pipeline network, reaching more than 500 customer stations.
Notable franchise zones include:
- Agrara, Ota, and Badagry (operated jointly by NNPC and Shell) with a capacity of 102 million standard cubic feet per day (MMSCF/D).
- Greater Lagos Industrial Area (GLIAS) (operated by NNPC and Gaslink) with a capacity of 130 MMSCF/D.
- Ikorodu (operated by NNPC and Falcon) with a capacity of 25 MMSCF/D.
- Kara Bridge-Ibafo-Sagamu Interchange (operated by NNPC and Nipco) with a capacity of 150 MMSCF/D.
- Lekki Free Trade Zone (operated by NNPC and Nipco) with a capacity of 25 MMSCF/D.
- Ogere-Ibadan-Oluyole-Olorisako-Asuire-Ajoda (operated by NNPC and Nipco) with a capacity of 150 MMSCF/D.
- Port Harcourt Cluster 1 & 2 (operated by Shell and CHGC) with capacities of 30 and 50 MMSCF/D, respectively.
- Ada (operated by NNPC) with a capacity of 30 MMSCF/D.
- Benin (operated by Nipco) with a capacity of 20 MMSCF/D.
In his keynote address, Farouk highlighted that the licensing regime marks a significant step in the development of Nigeria’s domestic gas market, facilitating the distribution of natural gas to energy-intensive industries, power generation, and various economic sectors. This will support Nigeria’s energy transition plans while creating new investment opportunities and socio-economic benefits.
The NMDPRA’s commitment to the sector also extends to providing regulatory oversight, supporting public-private partnerships, and ensuring the completion of critical infrastructure projects like the OB3 river crossing and the AKK pipeline.
Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, emphasized that the license regime is part of the government’s “last mile” gas expansion program, aimed at bringing gas supply closer to Nigerians nationwide. He stressed that the initiative aligns with the Gas Distribution Regulations of 2023 and contributes to the country’s energy transition and economic transformation.
The event was also attended by key stakeholders, including Kyari, Group CEO of NNPC, who reassured the license holders of the adequate supply of gas to meet demand within their respective zones, urging continued collaboration to maximize the sector’s potential.
